PARESH V SHAH, Mumbai V. DCIT-29(2(, Mumbai

ITA 799/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6720 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 13-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K GUBGOTRA J
• Assessee Lawyers: RADHA HALBE
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.799/MUM/2019 ( ASSESSMENT YEAR: 2013-14) PARESH V SHAH, 1402, 14 TH FLOOR, CENTRE POINT, 90 FT ROAD, MULUND (EAST), MUMBAI-400081. VS. D.C.I.T.-29(2) MUMBAI. PAN/GIR NO. AAEPS 6162 P (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY RADHA HALBE (ADV) REVENUE BY SHRI R.K. GUBGOTRA (JCIT-DR) DATE OF HEARING 05/02/2020 DATE OF PRONOUNCEMENT 06/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 03/12/2018 OF LD. CIT(A)-40, MUMBAI FOR THE A.Y. 20 13-14 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1 961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR DI SALLOWANCE OF COMMISSION PAYMENT OF RS. 4,37,370/- TO TWO PARTIES . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF WHOLESALE OF FERROUS AND NONFERROUS METAL AND ALLOYS. DURING THE COURSE OF SCRUTINY ITA NO. 799/MUM/2019 PARESH V SHAH VS DCIT 2 ASSESSMENT, THE A.O. FOUND THAT THE ASSESSEE HAS PA ID COMMISSION TO THE FOLLOWING PARTIES: (I) SHRI JITEN N SHAH COMMISSION PAID RS. 2,19,255/- (II) SHRI NARENDRA G SHAH COMMISSION PAID RS. 2,18 ,115/- RS.4,37,370/- THE A.O. ISSUED LETTER U/S 133(6) OF THE ACT TO CON FIRM THE GENUINENESS OF TRANSACTION REGARDING PAYMENT OF COMMISSION, HOWEVE R, THE LETTER RETURNED UNSERVED. IT WAS CONTENTION OF THE LD AR T HAT THE COMMISSION WAS GENUINELY PAID AFTER DEDUCTING DUE TAX THEREON AND THE SAME WAS ALSO DEPOSITED IN THE GOVERNMENT ACCOUNT. COMMISSIO N WAS ALSO PAID BY ACCOUNT PAYEE CHEQUE. HOWEVER, ON THE DATE OF SERVI CE OF NOTICE BY THE A.O., THE CONCERNED PERSONS WERE NOT AVAILABLE IN T HE TOWN DUE TO FAMILY FUNCTION OUTSIDE MUMBAI, ACCORDINGLY, NOTICE COULD NOT BE SERVED ON THEM. 4. BY THE IMPUGNED ORDER, DISALLOWANCE OF COMMISSIO N EXPENSES WAS CONFIRMED BY THE LD. CIT(A) AFTER OBSERVING AS UNDE R: THE COMMISSION EXPENSES WERE PAID TO VARIOUS PERSO NS BY ACCOUNT PAYEE CHEQUE THROUGH BANKING CHANNEL. THE AO ON INQUIRY I SSUED LETTERS U/S. 133(6) TO ALL COMMISSION AGENTS AND TWO PERSONS HAVE NOT RESPONDE D. THUS, THE AO MADE AN ADDITION OF RS.4,37,370/-. APART FROM THAT, THE AO ALSO ADDED RS. 52,276/- BEING 10% OF EXPENSES CLAIMED UNDER VARIOUS HEADS AS MOST OF THE EXPENDITURES ARE SELF MADE AND COULD NOT BE FULLY VERIFIABLE. THE AR OF THE APPELLANT IN HIS SUBMISSION STATED THAT ALL THE COMMISSION PAYMENTS WERE PAID T HROUGH CHEQUES AND ARE GENUINE. HOWEVER, THE AR OF THE APPELLANT COUNT NOT GIVE IDENTITY OF THE TWO PARTIES BY NAME SHRI JITEN M SHAN AND SHRI NARENDRA D SHAH. THE., APPELLANT COULD NOT PROVIDE ADDRESS OF THE ABOVE TWO PARTIES NOR ANY CO NFIRMATION FOR HAVING RECEIVED ITA NO. 799/MUM/2019 PARESH V SHAH VS DCIT 3 COMMISSION PAYMENTS TO THE EXTENT OF RS. 4,37,370/- STATED TO HAVE BEEN PAID TO THE ABOVE TWO PARTIES. HENCE, THE AO HAS DISALLOWED THE COMMISSION PAYMENTS PAID TO THE ABOVE TWO PARTIES AT RS.4,37,370/-. IN THE ABSENCE OF ANY PROOF OF HAVING PAID COMMISSI ON, MERE CLAIM OF PAYMENTS MADE THROUGH BANKING CHANNEL WILL NOT PROVE THE GEN UINENESS OF PAYMENTS MADE BY THE APPELLANT. HENCE, THE AO IS JUSTIFIED IN DISALL OWING COMMISSION PAYMENTS MADE TO BOTH THE PARTIES MENTIONED ABOVE, SINCE THE APPELLA NT COULD NOT BRING ANYTHING ON RECORD TO PROVE THE GENUINENESS OF THE PAYMENTS MAD E TO COMMISSION AGENTS MENTIONED ABOVE FOR CLAIMING COMMISSION PAYMENTS AT RS. 4,37,370/-. HENCE, THIS GROUND OF APPEAL IS HEREBY DISMISSED. 5. IT IS CLEAR FROM THE FINDINGS SO RECORDED BY THE LD. CIT(A) THAT THE ASSESSEE COULD NOT PROVIDE ANY PROOF OF IDENTITY A ND ADDRESS OF THE TWO PARTIES NOR ANY CONFIRMATION FOR HAVING RECEIVED TH E COMMISSION PAYMENT TO THE EXTENT OF 4,37,370/-. I FOUND THAT EVEN BEFO RE THE LD. CIT(A), THE ASSESSEE COULD NOT FILE ANY EVIDENCE OR PROOF OF HA VING PAID THE COMMISSION. EVEN BEFORE THE TRIBUNAL, THE LD AR CAN NOT PLACE ON RECORD ANY EVIDENCE TO SUBSTANTIATE THE IDENTITY AND GENUI NENESS OF THE TRANSACTION OF COMMISSION PAYMENT. ACCORDINGLY, I D O NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) AND UPH OLD THE SAME. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH FEBRUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 06/02/2020 ITA NO. 799/MUM/2019 PARESH V SHAH VS DCIT 4 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//